Federal Legislative Update

October 13, 2015

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∗ Funding for core local government programs∗ Reauthorization of highway and transit programs∗ The Internet Tax Freedom Act∗ Sales Tax fairness∗ Protection of municipal bonds∗ Prevention of unfunded mandates and preemption of local

authority∗ The Trinity River Corridor Project

Major on-going federal issues for the City of Dallas:

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∗ FY 2016 began on October 1 and Congress has yet to send President Obama any of the 12 annual appropriations bills (continuing resolution through December 11)

∗ The federal government will reach its statutory debt limit sometime in early November

∗ Federal highway and transit programs expire October 29 and the Highway Trust Fund that finances them will be close to a zero balance by next spring

∗ The Internet Tax Freedom Act expired October 1 (extended through December 11)

∗ Federal aviation programs expired September 30 (extended through March 31, 2016)

∗ The authorization for the Export-Import Bank expired in June∗ The Administration is moving forward with regulations related to

fair housing, clean water, clean air and overtime pay

Congressional Deadlines

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∗ The Murray-Ryan Budget Agreement gave congressional appropriators a common discretionary spending cap that avoided sequestration and forestalled major spending cuts for two years (FY 2014-FY 2015)

Budget Overview FY 2015

City of Dallas Allocation

Core Local Government Program FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

CDBG $16,270,526 $14,720,740 $13,921,262 $13,572,496 $13,457,745

HOME $7,480,380 $4,700,686 $4,240,210 $4,365,818 $3,956,627

Urban Areas Security Initiative $9,401,362 $5,295,442 $5,657,371 $5,816,375 $5,816,375

Byrne Justice Assistance Grant $1,063,711 $784,388 $701,791 $713,708 $624,061

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Budget Overview FY 2016 Appropriations

∗ The expiration of the Murray-Ryan Budget Agreement means that sequestration is back∗ The Administration proposed a FY 2016

Budget that assumes the end of sequestration

∗ Congress is crafting FY 2016 appropriations bills using a discretionary spending cap that reflects sequestration

∗ The final outcome for FY 2016 appropriations remains unclear, but with the Administration and Congress $75 billion apart, negotiations will be difficult∗ Debt limit, efforts to overturn

Administration regulatory actions, policy riders and other issues will complicate negotiations

FY 2016

AdministrationCongress

(Sequester)

Defense Discretionary $561 billion $523 billion

Non-Defense Discretionary $530 billion $493 billion

Total Discretionary $1.091 trillion$1.016 trillion

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Surface Transportation

∗ Prior to adjourning for the August recess, Congress enacted a three-month extension of highway and transit programs

∗ In addition to the short-term extension, the Senate also passed a six-year reauthorization of highway, transit and intercity passenger rail programs

∗ City priorities for reauthorization remain:∗ Expanded sub-allocation of highway

funds to urbanized areas∗ A strong local role in decision making ∗ A focus on metropolitan mobility,

including a strong transit program and expansion of the Transportation Alternatives Program

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∗ The six year Senate bill would cut highway funding sub-allocated to urbanized areas

∗ Senators Roger Wicker (R-MS) and Cory Booker (D-NJ) introduced an amendment to reverse those cuts and increase sub-allocation to metropolitan areas but the Senate did not take up the amendment

∗ The City has taken a lead role with national local government organizations and continues to work with the congressional delegation to ensure that reauthorization reflects the City’s priorities

∗ In addition, the City has developed a strong working relationship with the Department of Transportation, most notably the Federal Transit Administration, which will be important as DART moves ahead with a second downtown light rail alignment and light rail station platform extension, and the City moves ahead with streetcar expansion

Surface Transportation (Continued)

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∗ The Internet Tax Freedom Act was extended through December 11. In addition, the issue of sales tax fairness, a top City priority, has gained considerable momentum

∗ The House passed a permanent extension of the Internet Tax Freedom Act∗ The House-passed bill would maintain the exemption for Texas access line fees (approximately $36

million/year for Dallas), a top City priority∗ However, it would end the grandfather for Texas sales taxes on Internet access costing more than

$25/month (approximately $500,000/year for Dallas)∗ Senators Michael Enzi (R-WY) and Richard Durbin (D-IL) continue to insist that any extension of the

Internet Tax Freedom Act be paired with their sales tax fairness bill, the Marketplace Fairness Act (S 698)∗ In the last Congress, they introduced a bill that pairs the Marketplace Fairness Act (S 698) with a ten-year

extension of the Internet Tax Freedom Act, including all exemptions and grandfathers∗ In the House, Representative Jason Chaffetz (R-UT) recently introduced legislation (HR 2775) similar to the

Marketplace Fairness Act; it has garnered 46 cosponsors, including Representative Veasey∗ The City continues to successfully oppose efforts to preempt local authority in a number of areas,

including:∗ City management of public rights-of-way and City collection of fees for the use and management of

public rights-of-way ($27.5 million/year for telecom) ∗ City collection of hotel occupancy taxes ($50.3 million/year).

Internet Tax Freedom Act/Sales Tax Fairness/Local Authority

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∗ The City continues to work with the Army Corps of Engineers and the Congressional delegation to advance the Dallas Floodway Extension and Dallas Floodway projects. However, the moratorium on earmarks remains an obstacle.

Trinity River Corridor Project

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FEDERAL & STATE Fiscal Year 2015-2016 Lobbyist Contracts

October 13, 2015

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Recommend approval of contracts for legislative services with:

∗ CapitalEdge Strategies (Ralph Garboushian)∗ Paul Schlesinger and Hector Alcalde∗ Randy Cain∗ Kwame Walker∗ Jesse Romero∗ HillCo Partners

Overview

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Dallas is represented by CapitalEdge (Ralph Garboushian)∗ Monitors federal legislation impacting Dallas and works with the Texas Congressional

Delegation and the Executive Branch to advance City’s interests and priorities as directed by City Council

∗ Works closely with national municipal organizations, including National League of Cities and US Conference of Mayors, to ensure awareness of the City’s position and agenda

∗ Briefs Council Members and staff at annual meetings of NLC∗ Visits the City annually and at other times requested by the City∗ Works closely with City officials and staff to develop legislative and grant strategies

Dallas joined the Texas Cities Legislative Coalition (TCLC) in 1988∗ TCLC is Dallas, Austin, Arlington, and Denton

CapitalEdge - Federal

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∗ Helped to preserve:∗ Core local government programs in the face of sequester mandated austerity (CDBG, HOME,

local law enforcement assistance)∗ Urban Area Security Initiative (UASI), which provides the Metroplex with $14 million annually for

disaster and terrorism preparedness and response∗ Language that protects the City’s ability to charge rent for the use and management of City

rights-of-way (over $30 million annually) in the House-passed renewal of the Internet Tax Freedom Act

∗ Support from members of the House delegation for sales tax fairness∗ Strong delegation awareness of the importance of tax-exempt financing∗ General assistance and troubleshooting on a wide array of grant and regulatory issues ∗ Implementation of final 2008 ozone standard thus removing DFW from threat of redesignation to

“severe non-attainment”

CapitalEdge Recent Successes

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∗ Provides services related to the City’s infrastructure needs for the Trinity River Corridor Project including:

∗ Efforts to secure funding∗ Promoting adoption of legislative provisions that are

beneficial to the project∗ Opposing legislation or regulations that might compromise

the City’s ability to complete projects∗ Assisting with the development of strategies to facilitate

Army Corps of Engineers and Department of Transportation implementation of City priorities

∗ Provides legislative advocacy on federal transportation and water infrastructure that supports the City Council’s strategic priorities

Hector Alcalde and Paul Schlesinger -Federal

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∗ Helped to secure:∗ Over $100 million dollars for the Dallas Floodway Extension Project (DFE), most of which is

above the amount requested by the Administration. Funding for DFE was accomplished almost entirely through “earmarks”

∗ Nearly $100 million for Trinity River bridges∗ Over $11 million for the Dallas Floodway study, which is now complete∗ $459 million for federal authorization of the Dallas Floodway, prior to completion of the

Army Corps study process. The typical Corps process would likely have resulted in a project with much more limited scope

∗ Helped facilitate City discussion with Corps Headquarters on final approval of the Environmental Impact Statement for the Dallas Floodway

∗ Crafted clarifying legislation, despite the congressional earmark ban, that specifically includes west levee interior drainage as part of the above-referenced authorization

∗ Worked to secure $8 million for the DFE Project in the FY 2015 Corps Work Plan

Hector Alcalde and Paul Schlesinger Recent Successes

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Randy Cain, Kwame Walker, Jesse Romero

∗ All lobbyists conduct necessary research, information gathering, and other supporting activities by maximizing the use of legislative contacts

∗ Review, analyze and monitor interim committee activities as requested by the City Attorney

∗ Study and recommend legislative initiatives for the upcoming State Legislative session∗ Draft legislation as directed by the Assistant City Attorney

General Lobbyists (State)

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Initiatives Passed

∗ HB 1289 – Inclusion of commercial property in Urban Lank Bank Program∗ HB 3160 – Expands municipalities’ ability to file probate actions related to hazardous

properties ∗ HB 2590 – Related to Deceptive Trade Practices Act and criminal penalties in certain

real estate transactions∗ SB 158 – Body Camera Pilot Program∗ HB 100 – Tuition Revenue Bonds (UNT Dallas College of Law)∗ HB 1733 – Transportation for Hire (insurance)∗ HB 994 – Methane Recapture Property Tax Exemption∗ SB 1101 – Protected Region C’s interest in the Regional Water Planning Process

(Rep. Sheets’ amendment)

General Lobbyists Recent Successes

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General Lobbyists Recent Successes

∗ Restrict Annexation∗ Preemption∗ Restrict Home Rule Authority ∗ High Speed Rail∗ Bond Limitations∗ Revenue Caps ∗ Limit Eminent Domain∗ CHL Cop Stop∗ Anti-Toll road ∗ Concrete Barriers∗ Vehicle for Hire Preemption

∗ Eliminate Red Light Cameras∗ Veto Power by Regional Water

Planning District∗ Apply to Agency to Receive Disaster

Recovery Funds ∗ Scenic Texas Mandates Vegetation ∗ Public Information Mandates∗ Restrict TIFs∗ Urban Garden Tax Exemption∗ Cost Benefit Analysis Building Codes

Opposed legislation that failed passage

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∗ Hillco Partners represents the City on water issues in the Texas legislature and with State Agencies

∗ Works with City staff to represent the City on state level municipal water with a particular emphasis on funding for water resource projects, planning for water supplies, authority and regulation of water utilities, and use of eminent domain by utilities

∗ Advises the City on legislative actions and helps develop both short-term and long-term legislative strategies with respect to municipal water issues

HillCo Partners (State)

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∗ Identified and tracked over 100 bills which changed water statutes or policies that could have impacted the City

∗ No legislation was passed or signed by the Governor which was detrimental to the City’s utility or its water resources plans for the future

∗ Facilitated conversation between the City, HillCo, and members of the Legislature concerning future water supplies.

HillCo Partners Recent Successes

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Fiscal Year 2015-2016 Lobbyist Contracts

State & Federal Lobbyist Contracts

LOBBYIST FOCUS AMOUNT

CapitalEdge Strategies Federal $160,000

Paul Schlesinger Federal $43,650

Hector Alcalde Federal $73,800

HillCo Partners State $86,250

Randy Cain State $83,100

Kwame Walker State $45,000

Jesse Romero State $30,000

Total $521,80012

∗ October 13, 2015– Legislative Ad Hoc Committee Briefing

∗ October 28, 2015– Council vote on Lobbyist Contracts

City Council Timeline

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